It's about time.
Speaking with the Financial Times, Stellantis CEO Carlos Tavares revealed that he believes automakers will soon compete more aggressively on pricing, with discounts likely to return to the new car market before long. "Pricing power will be under pressure, which means we are back to the situation we knew a few years ago," said Tavares. "We all have to go back to the fundamental sales and marketing tactics that for the last three years have just disappeared."
This is great news for consumers who have found discounts to be in short supply in a market where demand far outstrips supply. But when can we expect these discounts to return?
Tavares believes that the high number of unfulfilled customer orders will act as a buffer for the first half of the year, but discounts should become more regular from automakers from the third quarter. However, the CEO believes that things won't be quite as they were before.
The pandemic caused supply shortages that impacted production flow, pushing up prices as those who had saved money during lockdowns had increased spending power. These and other factors forced automakers to reevaluate how they do business, affecting everything from attendance at major auto shows to the marked-up prices dealers could charge for cars.
As automakers endeavor never to never again repeat the ordeal of enduring extreme parts shortages, many have invested in diversified supply chains, often bringing component production in-house. On the plus side, this means that more companies should be able to meet production targets more easily, which will hopefully mean a surplus of inventory, encouraging dealers to compete on price. But the flip side of this coin is that automakers and dealers have become accustomed to outstanding financial results, and OEMs will be looking for ways of maximizing profits. Hopefully, this will not mean a downturn in quality, especially as all-new products like the Ram 1500 REV begin making their way to customers.
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